When Target decided to enter the Canadian market in 2013, it envisioned a rapid rollout of over 100 stores within two years, supported by a highly automated and sophisticated supply chain system. The strategy looked promising on paper, but the execution was rushed, and the technology behind inventory management and distribution was not properly tested or adapted to the new market.
Stores opened with empty shelves despite warehouses being full of stock, due to systemic data and process errors. The technology-driven supply chain was too rigid and failed to handle the operational realities of a new market and diverse product ranges. Within two years, Target Canada posted losses of over $2 billion and eventually shut down all its stores—a cautionary tale of prioritizing aggressive technology-led execution over a solid, adaptable strategy.
Network Services Practice Lead, Roc Technologies.
It often seems that organizations are too interested in the new high-tech gear, rather than the root of operations, asking themselves: cloud first? Cyber first? It can be easy to get carried away with the new features and functionalities of a shiny new AI or automation tool.
Without a clear understanding of the underlying problem, even advanced tools become ineffective, leading to wasted investments, poor adoption, and unmet expectations. Businesses need to step back, rethink purchasing decisions, define their wants and, understand the benefits of implementing such tools before making any hefty decisions that will end in a costly write off.
Think value, not hype
Out of all the heralded technology innovations in the last few years, AI has taken the spotlight. Generative tools, such as ChatGPT, have offered instant access to useful information, provided time-saving efficiencies for employees, and allowed tasks to be streamlined. However, this is only the case for companies that use generative AI tools regularly and in the right places.
A survey in 2024 found that only 2% of British respondents actually used generative AI tools on a daily basis – a contrast to the vast number of businesses that are signing up to use this technology. Organizations need to remember that technology without a purpose is a wasted cost that adds to the increasing financial pressures that many businesses are already feeling.
AI hasn’t been the only trend embraced in the last few years. The cloud is a further case in point where the problem-solving capability of the solution often hasn’t been considered. Initially, it is seen as a way to reduce costs though many organizations have been surprised by spiraling costs and integration headaches.
So, rather than following the mindset of ‘cloud-first’, the question should be: “Does cloud benefit my strategy?” Maybe only certain workflows benefit from moving to the cloud or, potentially, the service needs to be used just on certain days. Using the technology selectively and scaling down when it is not required, is part of the strategy that needs to be established to ensure that an organization stays cost-efficient, ensuring real value is gained.
Stakeholders are your best friends
How do businesses pivot to an outcomes-focused strategy? Too often, isolated departments and IT teams deploy technologies based on tech-first mandates with little input from those who will actually use them day-to-day. A shift in perspective is critically important. Organizations should engage key stakeholders closest to the pain points early in the process, allowing their insights to shape the strategy and identify effective, problem-solving tools.
There is a common misconception that successfully transforming an organization’s IT infrastructure means rushing into expensive deployments and buying the latest technology or chasing the newest trend cycle. However, just a more selective approach to automation and AI can extend the value of existing infrastructure to suit organizational goals.
From shiny tech to strategic outcomes
It’s easy to be mesmerized by digital transformations or to believe that what your organization is missing is AI automation. But success will rarely start with the tool.
A great deal can be learnt from Target: involve end users in planning stages and don’t be fooled by the hype. Remember, problem first, product second.
Outcomes need to be placed at the heart of every business strategy that way organizations can unlock far more value from the tools they already have, while making smarter, more deliberate decisions about what to adopt next. This might mean refining the use of cloud services or using automation to achieve efficiencies in areas where it makes a measurable difference
Starting with the obstacle and not the tech ensures that the outcome is a more efficient, cost-effective and sustainable approach to digital transformation.
Tech is just the tool. Strategy is the solution.
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